Refer to Figure 15-3. What happens to the monopolist represented in the diagram in the long run?
A) It will be forced out of business by more efficient producers.
B) It will raise its price at least until it breaks even.
C) If the cost and demand curves remain the same, it will exit the market.
D) The government will subsidize the monopoly to enable it to break even.
C
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If your marginal rate of substitution between two goods diminishes continuously as you give up one good for the other, that means the
A) price per unit of one good declines when you buy it in larger and larger quantities. B) two goods are perfect substitutes. C) two goods are perfect complements. D) two goods are neither perfect substitutes nor perfect complements.
A market failure arises when an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event
Indicate whether the statement is true or false
The decrease in the value of the dollar relative to the Japanese yen
A. increased the yen price paid and decreased the dollar price received from U.S. goods exported to Japan. B. decreased both the yen price paid and the dollar price received from U.S. goods exported to Japan. C. increased both the yen price paid and the dollar price received from U.S. goods exported to Japan. D. decreased the yen price paid and increased the dollar price received from U.S. goods exported to Japan.
An example of a Pigovian tax would be a tax on:
A. income. B. cigarettes. C. corporate capital gains. D. All of these are examples.